Manufacturing establishments reaches 25,064 in 2012                                                                     

The total number of all manufacturing establishments in the formal sector of the economy reached 25,064 according to the final results of the 2012 Census of Philippine Business and Industry. This number is 54.1 percent greater than the estimated number of establishments in 2010. This is attributed mostly to the newly listed manufacturing establishments for all employment sizes in the 2011 and 2012 Updating of List of Establishments.

Among the industry groups, the ten manufacturing industries that occupied the top eight slots accounted for more than two-thirds (70.4%) of the total manufacturing establishments for all employment sizes. Other food products led in terms of number of establishments with 7,407 establishments or 29.6 percent of the total. Beverages followed a far second with 2,322 establishments (9.3%). Printing and service activities related to printing industry ranked third with 1,549 (6.2%). These were also the three industries that occupied the top 2 slots in 2010 with beverages and printing and service activities related to printing sharing the second slot.

Other industries in the top eight slots are the following:

• Grain mill products, starches and starch products (1,237 establishments, 4.9%)
• Wearing apparel, except fur apparel (1,174 establishments, 4.7%)
• Furniture (1,018 establishments, 4.1%)
• Non-metallic mineral products, n.e.c. (754 establishments, 3.0%)
• Other fabricated metal products; metal working service activities (726 establishments, 2.9%)
• Repair of fabricated metal products, machinery and equipment (726 establishments, 2.9%)
• Plastic products (722 establishments, 2.9%)

Figure 1 shows the percent distribution of all manufacturing establishments by industry group in 2012.

The top three regions in terms of number of establishments were all located in the Luzon area with a combined total of 14,447 establishments or 57.6 percent. The National Capital Region (NCR) led the regions where a total of 7,435 (29.7%) establishments were located. This was followed by the neighboring regions of CALABARZON and Central Luzon with 4,269 (17.0%) and 2,743 (10.9%) establishments, respectively. Central Visayas recorded the largest count in the Visayas area with 2,663 (10.6%) establishments. While in the Mindanao area, Davao Region registered the most number of manufacturing establishments with 1,161 (4.6%) establishments.

Electronic components industry still employs the highest number of workers                                                          

In 2012, total employment generated by all manufacturing establishments was estimated at 1,185,998. This exhibited an increase of 21.3 percent from the total employment generated in 2010. Paid employees in 2012 made up 98.6 percent of total employment while the rest were working owners and unpaid workers.

Industrywise, the top ten industry groups have a combined share of 55.5 percent of the total employment. Electronic components industry, even with its relatively small number of establishments in 2012, still employed the highest number of workers with 142,748 or 12.0 percent of the total. Other food products with the most number of establishments ranked second with 120,963 workers (10.2%). Wearing apparel, except fur apparel, followed with 109,028 workers (9.2%). Ranking fourth and fifth were parts and accessories for motor vehicles, and computers and peripheral equipment and accessories with 59,739 and 56,875 workers, respectively.  Parts and accessories for motor vehicles out-ranked computers and peripheral equipment and accessories industry in the fourth slot in 2012. 

Other industries comprising the top ten slots in terms of employment generation are:

• Plastic products (41,528 workers or 3.5%)
• Other fabricated metal products; metal working service activities (34,098 workers or 2.9%)
• Non-metallic mineral products, n.e.c. (32,440 workers or 2.7%)
• Processing and preserving of fruits and vegetables (30,670 workers or 2.6%)
• Furniture (29,946 workers or 2.5%)

In terms of employment generation, this same set of industries were also in the top ten in 2010 except for non-metallic products, n.e.c. which replaced printing and service activities related to printing in the top ten in 2012.

Figure 2 shows the percent distribution of employment of all manufacturing establishments by industry group in 2012.

Among regions, the top three regions in terms of number of establishments were also the top three in terms of employment generation employing a combined total of 853,778 workers or almost three-fourths (72.0%) of total employment of all manufacturing establishments. CALABARZON, ranking second in number of establishments, generated the most number of workers numbering 443,046 or 37.4 percent of the total. NCR ranked second with 253,067 workers or 21.3 percent. Central Luzon followed employing 157,665 workers or 13.3 percent.

Refined petroleum products industry pays the highest average annual compensation

In 2012, total compensation paid to employees by all manufacturing establishments amounted to PHP278.6 billion or 36.5 percent higher than PHP204.0 billion generated in 2010. This is equivalent to an average annual compensation of PHP238,337 and PHP210,651 per employee in 2012 and 2010, respectively.  

At the industry level, refined petroleum products paid the highest average annual compensation of PHP1.8 million per paid employee. A far second was dairy products with average annual compensation of PHP903.1 thousand.

A total of 28 manufacturing industries surpassed the sector’s average annual compensation of PHP238,337. The following table shows the ranking of industries with an average annual compensation in 2012 reaching more than half a million.

The top three industries which paid the highest average annual compensation in 2012 were also the top three and the only industries with more than half a million average annual compensation in 2010.  

By region, CALABARZON, NCR and Central Luzon were the top three regions that accounted for more than three-fourths (76.8%) of total compensation. Cordillera Administrative Region posted the highest average annual compensation per employee at PHP338,398.

Value of output amounts to PHP4.5 trillion, electronic components industry contributes 16.8 percent of the total

Value of output generated by all manufacturing establishments was estimated at PHP4.5 trillion in 2012, representing an increase of 24.7 percent from PHP3.6 trillion generated in 2010.

By industry group, almost half (49.8%) of the total output value of all manufacturing establishments was contributed by seven industries. Electronic components remained to be the top contributor with an output share of 16.8 percent (PHP750.6 billion). Refined petroleum products followed with 10.7 percent share (PHP477.6 billion). Completing the list of the top seven contributors to more than half of the total value of output are the following:

• Computers and peripheral equipment and accessories (PHP246.6 billion, 5.5%)
• Other food products (PHP221.4 billion, 5.0%)
• Beverages (PHP195.1 billion, 4.4%)
• Dairy products (PHP175.0 billion, 3.9%)
• Parts and accessories for motor vehicles (PHP157.6 billion, 3.5%)

The top seven contributors to value of output in 2012 and 2010 are the same set of industries and have the same ranking for both years. In 2010, these seven industries also contributed almost half (48.0%) of the total value of output of all manufacturing establishments.

Figure 3 compares the top seven contributors to value of output in 2012 and 2010.

Regionwise, the combined output value of the top three regions was recorded at PHP3.5 trillion or a combined share of 77.8 percent. The following are the top regions in terms of contribution to value of output:

• CALABARZON, PHP2,010.0 billion (45.0%)
• NCR, PHP808.9 billion (18.1%)
• Central Luzon, PHP656.0 billion (14.7%)

Electronic components industry generates the highest value added                                                                   

Value added generated by all manufacturing establishments reached PHP1.2 trillion in 2012, an increase of 12.3 percent from PHP1.0 trillion in 2010.

Among the industry groups, the ten industries that occupied the top nine slots comprised 68.6 percent of the total value added for all manufacturing establishments. Electronic components led the top contributors to value added with PHP321.9 billion or 27.8 percent of the total. Computers and peripheral equipment and accessories placed second with PHP114.4 billion or 9.9 percent of the total value added. Beverages ranked third with PHP86.0 billion or 7.4 percent.

The ratio of value added to total employment, or a simple measure of total productivity, was recorded at PHP976.8 thousand.

Table 2 shows the most labor productive manufacturing industries in 2012 that exceeded a total productivity of PHP1.0 million.

By region, CALABARZON recorded PHP628.1 billion or more than half (54.2%) of the total value added which registered a total productivity of PHP1.4 million for the region. NCR ranked a far second with a value added of PHP197.8 billion (17.1%) and a productivity of PHP781.8 thousand.                                                          

Gross addition to tangible assets amounts to PHP150.0 billion in 2012

In 2012, gross addition to tangible fixed assets of all manufacturing establishments reached PHP150.0 billion. This figure is more than half (69.8%) of the gross addition in 2010 recorded at PHP88.3 billion.  

Industrywise, refined petroleum products recorded the highest gross addition at PHP43.4 billion or 28.9 percent of the total. Basic chemicals ranked second with PHP16.5 billion (11.0%).

At the regional level, CALABARZON led the regions in terms of gross addition to tangible fixed assets by posting the highest with PHP52.0 billion or 34.7 percent. Central Luzon followed closely with PHP47.7 billion or 31.8 percent. NCR, on the other hand, followed as far third with PHP24.1 billion or 16.1percent.      

Other electrical equipment industry receives almost half worth of the subsidies in 2012

Subsidies are special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry. This amounted to PHP5.8 billion in 2012, a value more than nine times of the subsidies received by all manufacturing establishments in 2010 (PHP0.6 billion).

Among industry groups, other electrical equipment received the highest worth of subsidies with PHP2.5 billion or almost half (43.4%) of the total. Electronic components followed closely with PHP2.2 billion (37.3%). Spinning, weaving and finishing of textiles placed third with PHP268.6 million (4.6%).

In 2010, there were only 13 industry groups that received subsidies and general purpose machinery received the biggest share with 57.6 percent of the total.

Regionwise, CALABARZON received the highest worth of subsidies at PHP3.3 billion or 55.8 percent of the total.  NCR occupied the second slot with PHP2.1 billion (36.7%), followed by Central Luzon which posted PHP280.0 million (4.8%). Altogether, the three regions accounted for 97.3 percent of the total subsidies received by the manufacturing se 

Sales from e-commerce accounts for less than half percent of total income                                                           

Sales from e-commerce was one of the data captured for the first time in the census. It refers to the selling of products or services over electronic systems such as the Internet Protocol-based networks and other computer networks, Electronic Data Interchange (EDI) network, or other on-line system.

E-commerce sales generated by all manufacturing establishments reached PHP18.8 billion, representing 0.4 percent of total income in 2012.  

Among industry groups, electronic components recorded the highest sales through e-commerce at PHP8.2 billion or 43.7 percent of the total, registering 1.1 percent of total income of the industry. Followed by processing and preserving of meat; and optical instruments and photographic equipment with e-commerce sales of PHP3.4 billion and PHP1.5 billion, respectively.                                                                      

Among regions, Central Visayas accounted for the highest e-commerce sales at PHP8.7 billion (46.0%) which represent 3.0 percent of the total income of the region.  NCR ranked second with PHP5.7 billion (30.4%). A far third was Western Visayas with PHP1.5 billion (7.8%).

TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2012 Census of Philippine Business and Industry (CPBI) for all manufacturing establishments.

The 2012 CPBI is a forerunner of the 2006 CPBI and one of the designated statistical activities of the former National Statistics Office (NSO) now Philippine Statistics Authority (PSA). Data collected from the census provide information on the levels, structure, performance and trends of economic activities in the country.  It also serves as benchmark information in the measurement and comparison of national and regional economic growth.

The census was conducted nationwide in April 2013 with the year 2012 as the reference period of data, except for employment which is as of November 15, 2012.

Data are presented at the national and industry group or 3-digit 2009 Philippine Standard Industrial Classification (2009 PSIC) and at the regional level. 

Legal Authority

The conduct of 2012 CPBI is authorized under the following legislative acts and presidential directives:

• Commonwealth Act 591
• Presidential Decree No. 418
• Executive Order No. 121
• Executive Order No. 352
• Executive Order No. 5

Scope and Coverage

The 2012 CPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:

• Agriculture, Forestry and Fishing (A)
• Mining and Quarrying (B)
• Manufacturing (C)
• Electricity, Gas, Steam, and Air Conditioning Supply (D)
• Water Supply; Sewerage, Waste Management and Remediation Activities (E)
• Construction (F)
• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G)
• Transportation and Storage (H)
• Accommodation and Food Service Activities (I)
• Information and Communication (J)
• Financial and Insurance Activities (K)
• Real Estate Activities (L)
• Professional, Scientific and Technical Activities (M)
• Administrative and Support Service Activities (N)
• Education (P)
• Human Health and Social Work Activities (Q)
• Arts, Entertainment and Recreation (R)
• Other Service Activities (S)

The census was confined to the formal sector of the economy, which consists of the following:

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

The frame for the 2012 CPBI was extracted from the 2012 List of Establishments (LE). The estimated number of establishments in the 2012 LE totaled 945,900 establishments in operation in 2012. Of this, about 28.0 percent or 262,800 establishments belong to the formal sector of which 87.0 percent or 229,500 establishments comprised the establishment frame. This frame was used to draw the sample establishments for the census.

Unit of Enumeration

The 2012 CPBI units of enumeration are the establishment and enterprise. However, this Special Release presents the results with establishment as the unit of enumeration. The establishment is defined as an economic unit under a single ownership or control which engages in one or predominantly one kind of activity at a single fixed location.

For manufacturing, the unit of enumeration consists of shop, factory, bakery, mill, distillery, refinery, cannery, abattoir, brewery, foundry, printing press, tannery or plant engaged in manufacturing, processing, fabricating or finishing products mechanically or manually including the assembly of component parts of manufactured products and the substantial alteration, reconstruction or repair of special type of goods and classified under economic organization such as: single establishment (EO=1), branch only (EO=2) and establishment and main office (EO=3). 

Classification of Establishments

An establishment is categorized by its economic organization, legal organization, industrial classification, employment size, and geographic location.

Economic Organization refers to the organizational structure or role of the establishment in the organization. An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.

Legal Organization refers to the legal form of the economic entity which owns the establishment. An establishment may be single proprietorship, partnership, government corporation, stock corporation, non-stock corporation, and cooperative.

The industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue. The 2009 PSIC was utilized to classify economic units according to their economic activities.

The size of an establishment is determined by its total employment (TE) as of specific date.

Geographic Classification. Establishments are also classified by geographic area using the Philippine Standard Geographic Code (PSGC) classifica

Methodology

Sampling Design

The 2012 CPBI utilized stratified systematic sampling with 3-digit or 5-digit PSIC serving as the industry strata and employment size as the second stratification variable.

For the sampling domain, the 17 regions serve as the geographic domain while 158 industry groups (3-digit PSIC) and 347 industry sub-classes (5-digit PSIC) serve as the industry domain.

Generally, the industry domain for establishments with TE of 20 and over is the 5-digit PSIC, while for establishments with TE of less than 20 is the 3-digit PSIC. However, for sectors C (Manufacturing), G (Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles) and I (Accommodation and Food Service Activities) those establishments with TE of 20-49, the industry domain is the 3-digit PSIC. For the manufacturing sector, 65 industry groups and 10 industry sub-classes serve as the industry domain.

Estimation Procedure

1. Non-Certainty Stratum (TE of 20-99)

The estimate of the total of a characteristicfor the non-certainty employment stratum in TE of 20 and over for an industry domain in each region (geographic domain) is

where:

             s       denotes the non-certainty employment stratum in TE of 20 and over

             p     = 1, 2,..., 17  regions (geographic domains)

     x_spj   = value of the j^th establishment in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

      j      =  1, 2, 3,…, n_sp establishments

 W_spj    = weight of the j^th establishment in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

N_sp = total number of establishments in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

  n_sp  = number of sample establishments in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

2. Certainty Stratum

The estimate of the total of a characteristic   for the certainty employment stratum in TE of 20 and over in an industry domain in each geographic domain (region) is

where:  

          c      denotes the certainty employment stratum in TE of 20 and over

          p    = 1, 2,..., 17 regions (geographic domains)

    x_cpj  = value of the j^th establishment in the certainty employment stratum in TE of 20 and over in an industry domain within each region

  j      = 1, 2, 3, …, m_cp establishments

 m_cp   = number of establishments in the certainty employment stratum in TE of 20 and over in an industry domain within each region

Total Estimate for TE of 20 and Over

The estimate of the total of a characteristicfor the industry domain in each region (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,

where   dp denotes the industry domains in each region

National level estimates of the characteristics by industry domain were obtained by aggregating separately the estimatesfor the particular industry domain from all the regions.

Weight Adjustment Factor for Non-Response

To account for non-response in the non-certainty strata, the adjustment factors, and (n/n’) was multiplied with the sampling weight (W) of each of the sampling unit. The sampling weight which is defined as N/n was recomputed as

For the non-certainty employment stratum in TE of 20-99, the adjusted weight (W’_spj) is

                   where:

N_sp   = total number of establishments in the non-certainty employment stratum in TE of 20-99 for an industry domain within each geographic domain (region)

n’_sp  = number of responding establishments in the non-certainty employment stratum in TE of 20-99 for an industry domain within each geographic domain (region)

Questionnaire Design

The design of the 2012 CPBI sectoral questionnaires not only took into consideration the requirements of national income accounting but also adopted the income and expense account in the Financial Statement of the establishment to provide respondents ease in the accomplishment of the forms. Income and revenue have the same concept in recording financial transaction of establishments while expense is cost incurred on a consumed basis.

The sample establishments responded also to the census through the use of Web-based version of the 2012 CPBI questionnaires which was accomplished online at the NSO website. Likewise, an e-questionnaire was also downloaded and submitted thru e-mail.                                                                                               

Response Rate

The overall response rate for the manufacturing sector was 91.7 percent (7,124 out of 7,768 establishments). Included are receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments, etc. 

For establishments with TE of 20 and over, the response rate was 91.7 percent (4,825 out of 5,261 establishments), while for TE less than 20 was 91.7 percent (2,299 out of 2,507 establishments).

Reports of the remaining non-reporting establishments were imputed based on established imputation methods and from other available administrative data sources.  However, reports of establishments in the certainty stratum, which were found to be duplicates and out of business in 2012, were not imputed.

Limitation of Data

Only the formal sector was covered in the census. It consists of corporations and partnership; cooperatives and foundations; single proprietorship with employment of 10 and over; and single proprietorships with branches.

Concepts and Definitions of Terms

Establishment is an economic unit under a single ownership control, i.e., under a single entity, engaged in one or predominantly one kind of economic activity at a single fixed location.

Total employment is the number of persons who worked in for the establishment as of November 15, 2012.

Paid employees are all persons working in the establishment and receiving pay, as well as those working away from the establishment paid by and under the control of the establishment. Included are all employees on sick leave, paid vacation or holiday.

Excluded are consultants, home workers, receiving pure commissions only and workers on indefinite leave.

Unpaid workers are persons working for at least one-third of the working time normal to the establishment and do not receive regular pay.          

Compensation is the sum of salaries and wages, separation, terminal pay and gratuities paid by the establishment to its employees and total employer’s contribution to SSS/GSIS, ECC, PhilHealth, PAG-IBIG etc.

Revenue includes cash received and receivables for goods/products and by-products sold and services rendered. Valuation is at producer prices (ex-establishment) net of discounts, and allowances, including duties and taxes but excluding subsidies.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchasers price including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.

Expense refers to cost incurred by the establishment during the year whether paid or payable. This is treated on a consumed basis.

Value of output represents the sum of the sale of products and by-products, income from industrial services done for others, sale of goods  less cost of goods sold, fixed assets produced on own account, and change in inventories of finished products and work-in-progress.

Intermediate expense refers to expenses incurred in the production of goods and industrial services such as raw materials used; other materials and supplies used; fuels, lubricants, oils and greases used; electricity and water purchased and industrial services done by others.

Value added is gross output less intermediate input. Gross output for the manufacturing sector is value of output plus income from non-industrial services done for others (except rent income from land). Intermediate input is intermediate expense plus expense for non-industrial services done by others (except rent expense for land) and all other cost.

Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.

Change in total inventories is computed as the total value of ending inventory less the total beginning inventory.

Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.

Total assets are resources including land owned and/or controlled by the establishment as a result of past transactions and events from which future economic benefits are expected to flow to the establishments.

E-Commerce refers to the selling of products or services over electronic systems such as the Internet Protocol-based networks and other computer networks, Electronic Data Interchange (EDI) network, or other on-line system.